Valuating Oil and Gas Assets? Here is some advice. | PetroValues Blog

Are you interested in financing, or acquiring oil and gas assets? The industry is booming and there can be a lot of upside for savvy investors. The first step is to understand the mineral worth of the property you’re interested in. Here are a few pointers for the valuation process, if you’re looking to strike it rich in the black gold market.

Slow and Steady Will Not Win this Race.

The US onshore oil and gas industry is hot right now. Companies are hustling to trade, acquire, and divest assets to better position themselves for success.  Prudent investors need to evaluate the deal quickly, or they risk losing out on the opportunity. Waiting weeks or months for an accurate valuation is just not cutting it anymore. The early bird gets the worm. The quicker you can make an informed decision, the better your odds of acquiring that prime acreage.

Do It Fast. But Do It  Right.

It is crucial that the valuations of oil and gas assets are accurate. Valuations are used as the basis for determining a fair offer price. In a bid scenario, if your valuation is inaccurate you may end up overbidding or losing to competitors.  Similar to home ownership,  If the appraisal undervalues your property, you may accept a low offer based on inaccurate information. Do it right. Make sure well information and production data are QC’d. Verify that the production forecast makes sense, and industry-accepted reservoir characterization methods were used to determine optimum well density
— Read on

Leave a Reply